1. For the purpose of providing medical coverage to employees, a company is considered a large employer when it employs AT LEAST how many employees?
A. 26
B. 51 Correct
C. 76
D. 101
Explanation
Under the Affordable Care Act (ACA), an applicable large employer (ALE) is one that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year. While 50 is the threshold, 51 is the closest answer representing 'at least' that number.
2. Which one of the following types of benefits is often excluded from coverage under an HMO plan?
A. Adult routine eye examinations. Correct
B. Physical examinations.
C. Out-of-area emergency services.
D. In-patient surgeries.
Explanation
HMO plans focus on preventive and medically necessary care within their network. Routine eye exams for adults (non-medical vision care) are often excluded as they are considered non-essential or optional, unlike preventive physicals, emergency services, and surgeries which are typically covered.
3. What is the period of time written notice of claim must be given to the insurer after the occurrence of the loss for an individual accident and sickness policy?
A. 10 days
B. 20 days Correct
C. 30 days
D. 45 days
Explanation
Standard policy provisions for individual A&S policies, as set by the NAIC, typically require written notice of claim to be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon as reasonably possible.
4. A deliberate lie by an insured to the insurance company to obtain a lower premium is an example of
A. estoppel.
B. twisting.
C. fraud. Correct
D. malfeasance.
Explanation
Insurance fraud occurs when an individual intentionally provides false or misleading information (e.g., about health, habits, or age) to obtain insurance coverage, a lower premium, or a larger benefit. It is a deliberate deception for financial gain.
5. A fraternal benefit society is characterized by all of the following EXCEPT:
A. it forms ritualistic work.
B. it is incorporated.
C. it is for profit. Correct
D. it does not have capital stock.
Explanation
Fraternal benefit societies are non-profit, member-owned organizations that operate under a lodge system, are incorporated, have no capital stock, and often have a ritualistic or social component. Their purpose is to provide insurance and other benefits to members, not to generate profits for shareholders.